Rudy sold US$130m in Bank Bali assets: IBRA

Rudy sold US$130m in Bank Bali assets: IBRA

JAKARTA (JP): Former president of Bank Bali, Rudy Ramli, is
"indicated" to have quietly sold some US$130 million of the
bank's loan portfolio assets which may increase the bank's
recapitalization cost, the Indonesian Bank Restructuring Agency
(IBRA) has disclosed.

IBRA deputy chairman Farid Harianto said on Monday that the
loan assets sold by Rudy included nonperforming loans (NPLs),
which were supposed to be transferred to the agency later on in
return for government recapitalization funds to be injected into
the bank.

"We're greatly concerned because this may increase the
recapitalization cost (of the bank)," Farid told a small group of
reporters at a gathering also attended by IBRA Chairman Glenn S.
Yusuf.

"But we're still verifying this indication and are
investigating where the money went," he said, adding that
international accounting firm KPMG reported the indication on
July 20 to IBRA.

KPMG was assigned to audit Bank Bali prior to joining the
government-sponsored bank recapitalization program.

The government promised in April that it would finance up to
80 percent of the bank's recapitalization program which,
according the latest estimate, increased to Rp 4.3 trillion as of
June.

Farid said that KPMG was still auditing the bank to calculate
the final figure of the recapitalization cost.

Publicly listed Bank Bali is expected to offer a rights issue
in October to raise funds to finance the recapitalization
program.

U.K-based Standard Chartered Bank, which has been controlling
the management of Bank Bali since July 26, promised to buy a 20
percent stake in Bank Bali through the rights issue.

IBRA took over ownership of Bank Bali on July 23 after the
Ramli family, the former owner of the bank, failed to come up
with 20 percent of the recapitalization fund needed by July 22.

Rudy told the media last week that he suspected Standard
Chartered might have been involved in stratagems to take over his
bank.

Rudy has also been implicated in the high-profile Bank Bali
scandal, in which some Rp 546 billion (US$80 million) was
transferred out of the bank in early June as a commission for
service given by investment firm PT Era Giat Prima (EGP) to help
the bank recoup some Rp 904 billion in interbank claims on
closed-down Bank BDNI.

EGP is owned by businessmen Djoko Chandra and Setya Novanto
who are affiliated with the ruling Golkar Party, raising
speculation that part of the commission was used to finance the
party's campaign to secure election of President B.J. Habibie in
November.

IBRA said earlier that Bank Bali should have not used the
service of EGP because interbank claims on closed-down banks were
guaranteed by the government through the blanket guarantee
program.

The Bank Bali scandal has irked the International Monetary
Fund (IMF), which is organizing some US$46 billion in bailout
funds for the crisis-hit country. The Fund has demanded an
independent, speedy investigation into the alleged scandal.

IBRA has appointed international auditor PricewaterHouseCooper
to validate its internal investigation into the Bank Bali
scandal.

"PricewaterHouseCooper will start working on Wednesday
(today). We want it to be completed immediately," he said.

Glenn said that IBRA's internal investigation focused on the
transaction made between Bank Bali and EGP.

"We have to cooperate with Bank Indonesia to trace where the
money went," he said, pointing out that IBRA had no authority to
enter state Bank BNI.

Bank Bali transferred the commission to the accounts of EGP's
Setya and Djoko at Bank BNI.

Glenn said that the agency's top priority was to collect the
money which was transferred out of Bank Bali.

Separately, Bank Indonesia Governor Sjahril Sabirin said on
Tuesday that EGP would return all of Bank Bali's money by
Wednesday (today).

He said that some of the money was already returned on Monday.

"Some of the money was returned yesterday but I have not
checked how much," Sjahril told reporters at the State Palace on
the sidelines of the Independence Day ceremony.

In a related development, law firm Muchyar Yara & Associates
lodged a strong warning on Monday to EGP's Djoko to immediately
withdraw his statement made last week to the daily Media
Indonesia that Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita was involved in the Bank Bali
case. (rei/prb)